PROFILES: From real estate attorneys to auctioneers, some business people have managed to make the down market pay off.
Most people in the L.A. commercial real estate community know Mark Weinstein as an investor and developer – and for good reason.
Weinstein, the founder of MJW Investments, owns the historic Sears warehouse site in Boyle Heights and developed the Santee Village lofts in downtown Los Angeles.
But these days he has a different focus: the receivership business. Weinstein has been a court-appointed receiver since 1992 – making the current recession the second time the business has been his main line of work.
Receivers are third-party professionals appointed by judges to manage assets during foreclosures. Because of the slew of properties in foreclosure, demand for receivers has increased dramatically over the last year.
Most often, a receiver simply maintains properties until an ownership change is complete. Less commonly, receivers may complete unfinished real estate projects and sell them. But that’s the part of the job that Weinstein loves, allowing him to work in his primary field, where there is little going on.
“We started taking a few (cases) a year or so ago and I said, ‘You know what? I really like this,’” said Weinstein, 51. “I like a challenge. You are taking something broken and trying to fix it.”
Weinstein, who’s generally paid an hourly rate, said he realized in early 2008 that the recession would be severe and decided to jump back into the work after some prodding.
“People in my organization said, ‘We have to go back into the receiver business.’ They said, ‘Let’s start marketing ourselves as a receiver. People don’t think of you as a receiver, they think of you as an owner, a developer,’” Weinstein recalled.
So far, he’s handled 15 cases since 2008 and consulted on about 10 others that were resolved before a receiver was required. He’s currently working on broken condo deals in Hollywood, Burbank and Reno, Nev.; retail centers in West Los Angeles, Hollywood and Hemet; hotels in Stockton and Las Vegas; and a handful of apartment projects across the state.
In the Burbank case, he was appointed the receiver in November of a 43-unit condo project at 1615-1622 Scott Road after the developer went into default. The project is about 95 percent done, but the case hasn’t been simple for Weinstein, he said, because records kept by the developer “were a mess” and “all these different subcontractors said they were owed all this money.”
In mid-December, Weinstein and his employees delved into a forensic accounting audit that they wrapped up about a month later. Now, he will ask the court for approval to finish the project since the original lender has agreed to provide additional financing. Construction should only take about a week. The property will then be sold, perhaps via auction or by a brokerage hired by Weinstein.
Weinstein first went into the receivership business after the L.A. commercial real estate market collapsed in the early 1990s. During the peak of the business a few years later, he had 50 employees who handled nearly 400 cases before the work dried up.
This time, the business is smaller: About 10 of MJW’s 20 employees work solely on the receivership business. Still, the work has also enabled him to keep staff that he might have had to let go because of the real estate slowdown.
“We definitely transitioned over a period of time people from development to asset and construction management,” he said.
Taylor B. Grant, a court-appointed receiver who has been in the business since 1989, believes that the business will peak by the middle of next year.
‘What we are seeing is a tremendous number of very talented developers becoming asset managers, repositioners and/or receivers,” Grant said.
Weinstein said that he expects to make additional hires if the business continues to grow. He believes there could be solid receivership work through 2013.
“Three good years,” he said.
Mark J. Weinstein Receiver
The Job: Receivers are third-party professionals appointed by the court to manage assets during foreclosures
Projects: Condos, hotels, retail centers and apartments in California and Nevada
Experience: Weinstein has been a receiver since 1992.
Compensation: Fee-based. Weinstein charges $250 an hour or a $1,000 flat fee for smaller projects.
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